Oil rises above $76 and heads for weekly gain

Oil topped $76 a barrel on Friday and was heading for a weekly gain of more than 4 percent following bullish economic and crude inventory data this week.

U.S. shares seesawed on Friday after three positive sessions in a pre-earnings pause before U.S. corporations kick off earnings season next week.

U.S. crude for August was up 81 cents at $76.25 a barrel by 1110 a.m. EST, while ICE Brent rose 91 cents to $75.62.

We're more or less in a holding pattern here waiting to see what new indicators come along, said Tim Evans, energy analyst for Citi Futures Perspective.

The obsession remains on the demand side of the market, the equities and the economic indicators.

Oil in New York was up more than 4 percent on the week, the biggest gain since the week ending June 18, after ending the previous week at a three-week low.

The S&P 500 .SPX index was up 0.01 percent while the Dow Jones Industrial average .DJI was off 0.07 percent in volatile and low volume trading.

Oil futures are moving up with Wall Street and (have) potential for further gains if equities push higher, said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago. Traders are weighing how short they should be ahead of the weekend.

Investors often see rising equities markets as a sign of economic growth, which generally spurs demand for oil.

Crude inventories in the United States dropped 5 million barrels last week, more than twice as much as expected, the Energy Information Administration said.

U.S. crude was still well below a 19-month peak above $87 reached in early May, having rebounded sharply from a trough below $65 on May 20.

Oil markets are awaiting Chinese trade data, to be published on Saturday, for further price direction.

Year-on-year import and export growth probably slowed last month from the sizzling pace set in May, in large part reflecting a higher base of comparison as the global recovery gained strength around the middle of last year.